Who determines how monies in a Pump It Up Regional Co-op Fund are spent?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
Monies in the Regional Co-op Fund may be spent for the purposes determined by a majority vote of the Regional Co-op Fund.
- (2) Each Regional Co-op Fund shall be organized, if at all, for the exclusive purpose of administering regional marketing programs and developing, subject to our approval, standardized promotional materials for use by its members in local advertising.
All advertising and marketing shall be submitted to us prior to first use as provided in Section 9.C.(3), and shall adhere to the standards set forth in Section 9.C.(4).
- (3) We shall be a member of all Regional Co-op Funds and are entitled to attend and fully participate in Regional Co-op Fund meetings; however, we shall not have a vote unless we or our affiliates operate a Pump It Up Business in the area covered by the Regional Co-op Fund.
If the members of the Regional Co-op are unable or fail to determine the manner in which Regional Co-op Fund monies should be spent, we may assume this decision-making authority following 10 days' advance written notice to the members of the Regional Co-op Fund.
Source: Item 23 — RECEIPTS (FDD pages 60–225)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, the allocation of funds within a Regional Co-op Fund is primarily determined by a majority vote of the members within that fund. These funds are designated for regional marketing initiatives and the creation of standardized promotional materials, all subject to Pump It Up's approval. This means franchisees have a direct say in how marketing money is spent in their region. However, all advertising and marketing materials must adhere to the standards set forth by Pump It Up and require their approval before use. Pump It Up is a member of all Regional Co-op Funds and can attend meetings, but only gets a vote if they operate a Pump It Up Business in the area.
However, Pump It Up retains significant control over the Regional Co-op Fund. If the members of the Regional Co-op Fund cannot agree on how the monies should be spent, Pump It Up can step in and make the decision themselves, provided they give the members 10 days' advance written notice. Pump It Up also has the authority to grant exemptions from the requirement of membership in any Regional Co-op Fund and can terminate (and subsequently restart) any Regional Co-op Fund. Upon termination of a Regional Co-op Fund, all monies in that fund must be spent for advertising and/or promotional purposes for Pump It Up Businesses in the relevant Designated Market Area (DMA).
This structure gives Pump It Up franchisees a voice in regional marketing decisions, while also ensuring that Pump It Up maintains control over brand standards and has the ability to direct funds if the co-op members are unable to reach a consensus. For a prospective franchisee, this means understanding the importance of actively participating in the Regional Co-op Fund to influence marketing strategies in their area. It also highlights the need to be aware of Pump It Up's ultimate authority over these funds and the potential for the franchisor to step in and make decisions if necessary.